Fiberoptic Cabling May Have Bottomed Out

Like many high tech products over the last few years, fiberoptic cable has experienced a roller coaster ride of extreme highs and lows.

2001 was a peak year for installations of single- and multi-mode fiberoptic. According to KMI Research, nearly 90 million kilometers were installed in 2001. This is a slight increase from the 88 million kilometers installed the year before.

One year later, installations dropped to only 55 million kilometers. Richard Mack, General Manager of the Providence, Rhode Island-based research firm, attributes the decline to long-distance operators, many of whom he says, ""are experiencing financial distress or have completed their network projects.""

He believes several factors may help installations rebound in the next few years, although at a much slower pace. For example, he points to ""more shorter distance applications that are closer to the customer,"" including what he describes as ""a movement of fiber to home networks.""

Mack adds that although cable television has completed most of its installations, ""there is some demand left."" He also foresees activity in the area of premises networks, such as buildings, campuses, and storage areas. He describes this as a small market with high growth potential. ""It delivers higher performance, but it is more expensive,"" he explains.

KMI Research expects demand for fiberoptic to grow by about 10 percent a year over the next few years, with installations rebounding to 77 million kilometers in 2006. EC